People Call in Sick: So do Stocks

Have you ever felt fine on Thursday when you left work, but overnight got sick, so sick you called in and said you couldn't come in today? You only had a temporary setback or minor cold, but a day of rest and lots of juices made you well. By Monday, all felt normal, and you returned to your routine. 

Stocks Can Get Sick Momentarily

We say in the book that the market is like attending a professional sporting event. There is always someone looking for any weakness in a stock. Writers and analysts post their findings, opinions, reports, and controversies in whatever form they work in. Often, a negative post is reposted or picked up by others who spread it on their own media. When you go to Finance.yahoo.com and enter the symbol for a stock, you will see a quote for the stock and several links to news about your company—negative reports cause the stock to go down while positive reports drive it up. Many short sellers circle stocks like sharks or birds of prey, looking for weakness. Most of the time, these are temporary.

Consider a fire at a refinery. The company cannot produce gasoline or jet fuel when fire breaks out. The refinery must shut down, assess the damage, and make repairs. The price of the stock declines. Eventually, whatever the damage, the plant will reopen. Some mutual funds or individual investors will sell their stock when this happens. If the facts are in doubt, short sellers will drive the price down. After the company determines the cause and how long repairs will take. It’s the same difference as you calling in with the flu or discovering you need surgery and extended rehab. We almost always return to good health. If it’s a regulatory issue or malfeasance, then the stock can suffer a longer or permanent decline. But most are temporary events.

Will you ride out the Storm?

On October 23, 2023, Chevron announced its acquisition of Hess Corporation. The companies had previously worked out the deal before the announcement, but shareholders were not aware of it until then. Very quickly, Exxon said it had a right of first refusal to purchase Hess under its contracts with the company. Months of wrangling and lawsuits followed. The merger had to be put on hold. It was not until an arbitration board allowed the merger on July 18, 2025. Hess stock traded at dead money during the impasse. What should a stockholder of Hess do during this time? The Poetry Society of Virginia owned 50 shares of Hess from around 2017 at $34 a share until the end of 2022, when it rose to $137 before the acquisition. Generally, in a case like this, the individual shareholders can just ride it out until it's settled, since there was a floor under the stock during the tug of war between Chevron and Exxon. 

What if you had been a shareholder of BP [British Petroleum] when the Deepwater Horizon exploded? The stock declined about 55% in the months after the disaster. BP stock did recover most of its value, but if it’s a major disaster, sell it and look for a new opportunity. We owned a few shares of Sarepta [SRPT] when it had hope for new treatment for Duchenne Muscular Dystrophy. The stock collapsed when the treatment caused some deaths. We underestimated the risk, but payoff for some new treatments can be “blockbusters” for a drug stock. Best to buy a mutual fund for this kind of stock.

Decide how Patient and Resilient You Are

Stocks are the employees of your portfolio. Some will get sick, some will get tired, and some will quit. It’s like a workplace. Think of situations you’ve been through at work. You got hired, there were reorganizations along the way with difficulties, and you received raises and promotions. Generally, these all work out for the best. But if you’ve been a manager of an area, you know the troubles your workforce encounters. Stocks are the same way. Stocks often require quick decisions and sometimes heartache.